SDG 8 - Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all

Here is the three sentence summary of the chapter. COVID has had big impacts on economic growth for many countries. Are countries expected to quickly bounce back? If so, will the growth be broadly shared?

COVID-19 has been a major disruption to GDP growth. This chapter will discuss some of the losses in GDP due to the COVID-19 pandemic. It will do so by comparing GDP in 2019 (the year before the pandemic) to GDP in 2020 and 2021.

The chapter will then discuss how projections of future economic output have been affected as well. Many countries appear to have permanent long term damage to their economies. Comparing GDP projections from January 2020 (COVID-19 wasn’t even mentioned as a factor in the January 2020 Global Economic Prospects report) to GDP projections from January 2022, many countries are expected to have less economic output than projected in January 2020.

Finally, a discussion will be given on the relationships between GDP and economic inequality. Since COVID, many countries have focused on “Building Back Better”, including a commitment that economic gains are more broadly shared. In the closing section of the chapter, historic episodes of economic growth will be evaluated and compared to the level of inequality seen in the country (as measured by the Gini coefficient). In some countries that have seen economic growth, there have been periods of rising inequality. In others, economic growth has led to decreased inequality. It would be nice to pair these empirical with a discussion of some cases of countries that have done better at promoting broadly shared econoomic growth and some reasons for why they were successful.

Cumulative losses in GDP

Next show GDP growth rates for regions for 2019 to 2023. The 2021 is the estimated value according the World Bank’s Global Economic Prospects, and the values for 2022 and 2023 are projections.

Growth was generally very bad in 2020. Bounced back to some extent in 2021 and in future.

Country Losses

However, just because GDP has bounced back doesn’t mean damage wasn’t done. When we compare how fast we expected GDP to grow prior to COVID and compare to projections today, it is possible to see major damage. In the graphs below, the solid lines are the projections reflecting COVID using the January 2022 Global Economic Prospects, while the red lines are where countries were expected to be before COVID.

Below shows some plots for a mostly randomly selected list of countries. India and Indonesia are important examples to potentially highlight. They are the 2nd and 4th most populated countries in the world, representing large population. The graphs show very large gaps between expected GDP starting in January 2020 to current projections in January 2022, suggesting permanent damage. Egypt & United States are expected to surpass GDP projections from January 2020, so they had strong recovery. China is nearly matching January 2020 projections, so not much long term impact.

Tradeoff GDP and GINI

One case where inequality did increase as economic output increased is China. Looking at the lower left quadrant of the graph, you can find GDP and Gini coefficients starting in 1980. For China, both GDP per capita and Gini were low compared to later values.

Extra code

Feel free to ignore this section. This contains some code using the IMF’s WEO data, as an alternative source. Not needed most likely, but keeping just in case we change our minds.